First Published on 19th December, 2018
Ai Editorial: When there is an intersection of attitudinal and behavioral loyalty, it results in an emotional level of connection. And that’s a sign of true loyalty. Ai’s Ritesh Gupta assesses where airlines stand in this arena.
The combination of technology, data, analytics and even new processes such as IATA’s One Order is expected to play a major role in fostering loyalty going forward.
But this journey is still in the preliminary stages for most of the airlines and there is a long way to go before all of it stitches together a formidable personalized delivery of service. Long way because even though airlines are evaluating and going for technology platforms that prioritize security as well as manage multiple, complex data sources, capturing data from every interaction is far from being a reality. A case in point is interactions on the day of travel – at the airport, at the gate, on-board etc. These can be vital sources of how a loyal passenger rates an experience and what can be done to improve the same and the consumption of the product.
Coming to grips with the gap
Studies have highlighted the issues associated with loyalty. Earlier this year, Google stressed that marketers must think about earning both - attitudinal loyalty (how loyal a traveler feels) and behavioral loyalty (how loyal a traveler acts). Attitudinal loyalty revolves around delivering superlative experiences and has strong ties into customer support. But it doesn't always translate into action. Behavioral loyalty, which might not be a true indicator of one’s satisfaction level, is whether or not customers act loyal by opting to book the same brand. To stand out and earn both attitudinal and behavioral loyalty, a brand has to excel and serve appropriately across a gamut of touchpoints. And one could be interacting via a personal device, at the check-in counter, a kiosk at the airport, at the gate, with a flight attendant etc. This looks like a herculean task if one hasn’t even started yet.
Airline and hotel loyalty expert, David Feldman, says, “When there is an intersection of attitudinal and behavioral loyalty, it results in an emotional level of connection. And that’s a sign of true loyalty.” He says it is imperative for brands to focus on the data aspect as well as the value proposition of the loyalty offering. Citing an example of a retail program, he said a customer can join a program, avail a discount coupon frequently and exhibit a habitual shopping pattern. It could denote behavioral loyalty, but may not necessarily result in an emotional connection. “Rather it would be prudent to act on the available data and ensure every push notification or email demonstrates certain value in the offers being sent (or even a piece of communication that is related to consumption of the product),” he said.
Value isn’t just about incremental revenue
It is laborious to go deeper into serving across different phases of a journey, but airlines have to be ready to serve the traveller.
“Use data not only for offers but rather imagine what is the overall experience like for their loyal travellers. Experience needs to be less frustrating,” highlighted Feldman. Imagine a scenario where a loyal traveller prefers to sit on the aisle, and hasn’t booked such a seat. It is for the airline to understand such preference and offer whenever it can at an opportune time. What’s the point in the seat being available and the traveller noticing the same on his or her own? “Incremental revenue is a natural progression provided an airline is able to understand the journey better and even more importantly makes the journey comfortable and less frustrating,” said Feldman.
Work in progress
For those who are in pursuit of recognizing each traveller by working out their respective unique profile, there are hurdles but nevertheless there are rewards to be reaped. For instance, as proposed with One Order, it would replace PNR, EMD and E-ticket, and combine the booking and ticketing records into a single customer focused order. Now if one blends this with past data available about each passenger, real-time data, continuously acting on it, and offering a relevant rules-driven automated signal to the staff at the airport, this would only help in servicing the loyal traveller better.
Of course, there are areas that aren’t going to make all of this a breeze. One area which demands major attention is offline data – say interactions on the day of travel at the airport. The industry is trying to include emotional data into what is already available – transactional and behavioral data. Even as technology is improving to capture the same, airlines, like other organizations, aren’t yet clear with data privacy-related issues.
But airlines can’t sit idle and have to strive to understand travellers better. Otherwise they won’t be able to get closer to earning both attitudinal loyalty and behavioral loyalty.
Hear from experts at the upcoming Ancillary Merchandising Conference to be held in London 9-11 April, 2019
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First Published on 10th October, 2018
Ai Editorial: The trend of airlines letting their members burn their loyalty currency on 3rd party sites is yet to pick up in a big way in Asia, writes Ai’s Ritesh Gupta
The likes of GetGo in Philippines and India’s JetPrivilege are associated with the biggest shopping players in their respective markets. But the way, for instance, Hilton, is allowing its members to redeem their Hilton Honors Points for purchases at Amazon.com, such a trend is yet to become common in the Asia Pacific region.
· E-commerce players in India, including Amazon and Flipkart, are ready to unleash their mega shopping deals in mid-October. Consumers, too, are ready to capitalize on offers, mainly owing to the biggest festive season in India. JetPrivilege, with a base of 8.5 million members, is offering its members earning opportunities directly on their purchase at Amazon and Flipkart. The programme, which is managed by Jet Privilege Private Limited (JPPL), a joint venture between Jet Airways and Etihad Airways, has been looking at ways and means to delight it’s members across various customer touchpoints. JetPrivilege understands that when members are offered choice and flexibility in the way they earn and redeem their reward currency, their engagement with the programme increases, which in turn leads to them sharing more data about their choices with the programme.
· GetGo, the lifestyle rewards program by Cebu Pacific, works with Lazada Group which operates Southeast Asia’s number one online shopping and selling platform. Users earn GetGo points when they shop with Lazada.
· In case of Air China's Phoenix Miles, members can buy non-travel products from 300 partners. But this shopping is only restricted to the airline-owned site/ app. Members can't shop with their loyalty currency on other e-commerce platforms or offline outlets.
It’s about flexibility and convenience
So all a Hilton member needs to do is link their Hilton Honors account to their Amazon.com account, and as announced last year, one could redeem their points every time they made a purchase at Amazon.com. One could use as many or as few points they wish to. In fact, as has become the case with loyalty shopping, one could also partially use points for part of their order and have the remaining balance charged to any other eligible payment method. All of this could done and accessed at the time of check-out.
Letting members redeem loyalty currency at Amazon or any other e-commerce app that is opened quite frequently is about the ease of shopping, flexibility and convenience.
“Our currency is limited in terms of how (members) can spend it (mainly around flights and ancillaries),” says Nik Laming, General Manager – Loyalty, Cebu Air Pacific Air. As per the information available, GetGo is close to having a base of 4 million users, in a span of three and a half years.
“We are evaluating how far we intend to go down the road of becoming a digital currency (especially in the context of redemption options). We are undecided but we are likely to land somewhere in the middle. Or at least to start off so that we expand the redemption options, which might include to shop (with loyalty currency) at Lazada or other partners. We may not go the whole way of saying they (points) are equivalent of dollars and allowing it to be spent anywhere,” indicated Laming, who was recently in Bangkok for Ai’ s #MegaAPAC conference.
Frequent vs. infrequent travellers
There has been discussion around whether FFPs should become a two-sided marketplace. “The decision to participate on 3rd party sites depends on several factors, and one of them is related to the profile of travellers. If an airline believes that running a classic frequent flyer program that tends to rely mainly on frequent flyers and can be actively engaged via flying benefits, rewards etc., then they might not open up to be a completely digital currency,” mentioned a source. “On the other hand, a lifestyle rewards program is different from a frequent flyer programme. It could be after a traveller who only travels once or twice a week, for them to open up a range of earn and burn options is understandable. It is important for such progammes to understand who their members are, what motivates their purchases, how they eventually spend money etc.”
“Our big focus is on the earn side. So we wanted to build the ecosystem of “earn” first. Because the average infrequent traveller we are trying to appeal still aspires to travel, so the reward they want is travel. Also, to make it appealing to a broader audience, we also need to look at other redemption options. Could be of a smaller ticket size – redeeming a burger at the airport to a hotel accommodation – still could revolve around the travel experience,” mentioned Laming.
Hear from senior industry executives about loyalty at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).
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First Published on 5th October, 2018
Ai Editorial: The utility of blockchain, a shared, secure ledger of transactions distributed among a network of computers, in the travel sector is on the rise. Still there is a mixed response as far as this technology going mainstream in the near future is concerned, writes Ai’s Ritesh Gupta
Blockchain’s use cases, both the in B2C and B2B sectors, have been on the rise this year.
Key developments from various disciplines include:
· One of the attractive areas in the B2C arena is capitalizing on transparency that blockchain provides for digital transactions to simplify a traveller’s journey. For instance, a customer buys tickets – flight, train, local transportation etc. – and owing to the efficiency of the blockchain ledger one purchase is recorded. This way mobility companies end up offering end-to-end travel, and the ledger accurately splits the payment part, too. DB Systel, the IT provider for Deutsche Bahn (DB), is looking at this option, working with IBM for the same.
· Online travel company Webjet this year worked on a blockchain-based data reconciliation B2B offering to sort out transaction rows associated with the hotel distribution industry. The objective was to take care of hotel booking disputes in real-time. According to Webjet, a smart contract establishes neutral transaction accounts and can inform any organization contributing in the chain as transaction disputes emerge.
· A company like ATPCO, too, is looking at blockchain to contribute in the arena of airline distribution. The company asserts that one use case that can be evaluated is related to NDC and One Order implementations by featuring a distributed and decentralized trust-based authority for offers and orders. According to the proof of concept suggested, ATPCO can “act as the authority for the integrity of the offer to ensure that all actions surrounding the offer are managed correctly, accurately, and in compliance with tax, industry governance, and any applicable interline agreements”.
Talking from loyalty perspective, an airline executive mentioned there is no dearth of application of blockchain in the loyalty space but one needs to be pragmatic when it comes to this technology fuelling innovation. “It (blockchain) comes into play especially where there has been some kind of previous transfer or messaging being used for transactions. We already had the ability to do transfers and transactions in loyalty through APIs and prior to that through file transfers. So is blockchain going to make a difference by being a support function i. e. to support a business strategy? So clearly business strategy won’t change as a result of using blockchain.”
Nik Laming, General Manager – Loyalty, Cebu Air Pacific Air, agreed and shared his perspective around what to expect from blockchain.
“There is no doubt that blockchain is a technological innovation,” he said. “(It needs to be considered that) blockchain does have applications, no doubt. But it is being used more as a gimmick at the moment. Rather it should be an IT-driven initiative looking at better ways to transfer data from one system to another.” Laming added, “There is scope for lot of applications of blockchain, both in airlines and in the loyalty arena. (Suitable) where you have got any transfer of data between one system and another especially in the financial world and as loyalty transaction processing system are very similar to banking system anywhere you have got a transfer. For example, to integrate with a partner you could use blockchain effectively to make that transaction so that there was no risk of failure and only one ledger that gets updated.”
Blockchain is being counted upon to open attractive rewards for loyalty program members. It would help in offering the missing flexibility to spend their loyalty currency. It is being highlighted that just as blockchain-powered solutions help financial transactions happen instantly, they can speed up rewards redemptions too.
Among potential shortcomings, it is being highlighted that this technology is yet to have the technological proficiency required to manage commonplace loyalty requirements beyond basic currency transaction processing.
Loylogic recently referred to single program use case and multiple program use case for blockchain. Dr. Akif Khan, Head of PointsPay, mentioned that it would be tough to “envision any large loyalty program investing wholeheartedly in moving its infrastructure onto a blockchain-based solution when the value proposition compared to existing proven technology remains difficult to prove and quantify” at this juncture. He also highlighted that in case of multiple program use case, issues such as disengagement from the brand need to be considered. In his concluding remark, he stated that at this relatively early stage in the technology’s evolution, blockchain still feels like a solution looking for a problem in the loyalty space.
Hear from senior industry executives about blockchain at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).
Follow Ai on Twitter: @Ai_Connects_Us
First Published on 28th September, 2018
Ai Editorial: The quality of data has a big role to play in knowing loyal customers better and one way to step up the same is making the reward store more attractive by offering choice. If cracked right, this can be a beneficial virtuous circle for operators of FFPs, writes Ai’s Ritesh Gupta
Offering choice to a loyalty program member isn’t new, but it is now imperative as more one redeems or even accesses an app to check out options, more is the likelihood of knowing a traveller better.
Airlines are banking on a data platform as a decentralised framework built for agility. And this is being exemplified by openness to breaking data silos, and even looking at ways to capturing real-time behavioral data and acting on unstructured data. The quality of data has a big role to play in knowing loyal customers better and one way to step up the same is making the reward store more attractive. Choice is a way to deal with inactiveness or discontentment among members.
Significance of choice in FFPs
A loyalty program’s survival and success is all about making the right choice, asserts Loylogic’s CEO Dominic Hofer.
In a blog post, he wrote, “We take for granted having so many choices in life, but when we have no choice in a matter then we remark upon its absence in a negative way.”
Hofer recommends that companies not only need to focus on a diversified range of trending merchandise, but also offer different means of redemption.
India’s JetPrivilege (JPPL), a joint venture between Jet Airways and Etihad Airways, acknowledges that when members are offered the choice and flexibility in the way they earn and redeem their reward currency, their engagement with the programme increases, which in turn leads to them sharing more data about their choices with the programme.
Also, by letting members collect loyalty currency when they spend on daily products like fuel and relatively frequent buys like movie tickets or dining out, JetPrivilege is also stepping up its efforts to track the activity of the user. “…search, digital platform’s usage, cart abandonment on our site – everything is being tracked. This online data is being blended with underlying offline data and it results in the evolution of our journey (of being customer-centric via data-driven initiatives,” mentioned Manish Dureja, MD, Jet Privilege in a recent interview. He shared that JPPL is adding around 4000 members on a daily basis.
The JPPL team has been working on plans to scrutinize whatever data is available and creating unique profiles all of its members. As per the recent update, there were 22 databases/ systems and more are being integrated.
Offering choice when it comes to using loyalty currency
Specialists also point out that choice isn’t about just redemption. It is also equally important to let one pay in a variety of ways, say a mobile wallet option in a particular market, or use the loyalty currency for the same. Plus, redemption isn’t restricted to an airline’s digital asset only. Airlines have been extending the use of their loyalty currency in channels outside their own environment. use their miles or points for an online purchase on a 3rd party site.
How to increase the stickiness of your FFP or loyalty programme? Hear from experts at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).
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First Published on 27th July, 2018
Ai Editorial: JetPrivilege has been focusing on the single view of its members ever since its existence as an independent entity. Ai's Ritesh Gupta assesses how the company is strengthening its data prowess.
Airlines, as an industry, has had to live with a tag of being a `laggard’ for years owing to the process-centric nature of this business. But there have been carriers that chose to embark on the digital trajectory earlier than others and the same reflects in where they stand today.
One such carrier is India’s Jet Airways. The company took a massive step around four years ago. The airline chose to set up a separate entity, Jet Privilege Private Limited (JPPL) to manage its frequent flyer programme (FFP), JetPrivilege. JPPL, a joint venture between Jet Airways and Etihad Airways, is a specialised loyalty and rewards management company, set up to develop, manage, operate and market the FFP. The programme has grown aggressively, to touch a base of 8.5 million members over the years. In August 2016, the base crossed the 5-million mark, and it ended up at 7 million last year. The pace with which the programme has shaped up indicates that the JPPL team has been successful in its journey to build the programme as a platform-based, digital business.
To fully capitalise on the potential of FFPs, companies need to connect all the dots and work out a strong profile of the customers. JPPL has been working on the same.
“We are always on the lookout to bring new features and improvements to our programme. The path we take eventually leads us to – ‘what does the data say?’. We have focused our efforts on establishing an environment and culture that is data-centric, it has been the key for us. Data has proved to be a fuel to foster innovation, define the value of the programme, for testing (whether something is working or not) and eventually to hack profitable growth in all our businesses. This journey is an ongoing one,” shared Manish Dureja, MD, Jet Privilege. He shared that JPPL is adding around 4000 members on a daily basis.
Data journey of Jet Privilege
Reflecting on the data journey, Dureja said “We have been focusing on the single view of the member (ever since JetPrivilege’s existence as an independent entity). The programme had access to multiple touchpoints and systems…so we started stitching data around the profile of each and every member. There were 22 databases/ systems and we focused on leveraging all of them – counting on more than 2200 different attributes for a member. This essentially reflects information about the member – their transaction amount, their chosen channel for purchase (e. g. the agent/website they bought the ticket from), their check-in habits, usage of excess baggage allowance, and their transactions with our more than 150 programme partners (across various sectors including retail, telecom, lifestyle, dining, entertainment etc.) to accumulate JPMiles etc. So we have used this transaction system data for building unique customer profiles of our members.”
This profile is being further strengthened with the data on the online behaviour of the members on the programme’s various digital platforms.
“The activity of the user – search, digital platform’s usage, cart abandonment on our site – everything is being tracked. This online data is being blended with underlying offline data and it results in the evolution of our journey (of being customer-centric via data-driven initiatives),” mentioned Dureja. Certain databases are independent, in addition to ones which are related to Jet Airways. “And some are proprietary, too,”. The main objective is to make interactions more rewarding and to offer unique experiences to the members. And this will only get strengthened as JPPL is yet to capitalize on the mobile app usage data. There is an app which is available, but it is for users who intend to search and book Jet Airways’ flights. “How members earn and burn the loyalty currency is a vital aspect and this data would continue to help in understanding the same. So we are constantly looking at more avenues to strengthen our analytical capabilities across our assets (such as mobile app) and even with partners (in the future). Till date we have largely acted on 1st party data, i.e. the data that our customers leave behind on our systems/ touchpoints.” He added, “It is imperative for us to ensure there is loyalty towards our partners. Data is the key to it. We have created an ecosystem where every stakeholder/partner is associated with loyalty currency, JPMiles.”
Being a part of a member’s lifestyle
In addition to circling around the aspirational value, for instance, the dream of flying to a destination or meeting the needs of other trip essentials (such as Hotels and Insurance), JPPL has also initiated being an everyday lifestyle loyalty and reward platform, focused on personalized interaction and convenience for members. “Our focus is establishing JPMiles as the currency of the future that is versatile and goes beyond flying.”
Recently, JetPrivilege members were offered an option to earn as well as redeem their JPMiles for fuel at select IndianOil outlets (this partnership with the fuel major will be rolled out in a phased manner, with a potential of covering all of IndianOil’s 20,000 outlets across the country), marking the first such deal between a frequent flyer programme and a Fortune 500 company in India’s fuel and energy sector. FFPs are also looking at integrating their respective loyalty programmes into a member’s everyday life by rewarding the members for their spends on luxury, fashion or any other high aspiration products, as well as for their spends on fuel or grocery shopping or reserving a table for curated meals at select restaurants.
In the travel hospitality sector, JPPL recently introduced its hotels.jetprivilege.com platform featuring 1.5 million properties from the likes of Booking.com, Agoda.com, Expedia.com, Hotels.com, Homestay.com etc. “We have positioned ourselves as a meta-search for hotel properties via this platform (the booking is completed on partners’ sites) to earn JPMiles,” said Dureja.
As for association with platforms with massive traffic such as Amazon India, Flipkart, Paytm in India etc., Dureja mentioned that not all fall in line with what JetPrivilege stands for. “We don’t partner with Paytm as it’s largely a cashback platform. Our reward ecosystem is an anti-thesis of the cashback system,” he said. “We have a currency that offers a lot more than what cashback has to offer and that’s where our value proposition is.” He further added, “We do work with Flipkart and Amazon and our members who shop with them earn JPMiles” (The members have to go through an affiliate website managed by JetPrivilege to earn JPMiles).
JetPrivilege, like other customer-friendly FFPs, is looking at ways and means to delight it’s members across various customer touchpoints. For instance, they are experimenting with various initiatives like offering a simplified option at the check-out on their shopping site, pay with JPMiles or ‘JPMiles + Cash’ etc. to sustain the stickiness of the loyalty programme. JetPrivilege is also moving away from expiring JPMiles for their members, as long as the members have performed one eligible activity in their membership account over the last 18 months. Dureja added that all these initiatives are important to get members closer to a transaction and even help them in experiencing a world of privileges and benefits, which they would appreciate.
“In today’s world there is no brand that can sustain without offering control and convenience to customers,” he said. “For us JPMiles is the only leverage we have, so we have to offer it (JPMiles) judiciously to ensure there is a deeper engagement with our brand.”
JetPrivilege understands that when members are offered the choice and flexibility in the way they earn and redeem their reward currency, their engagement with the programme increases, which in turn leads to them sharing more data about their choices with the programme.
“It all boils down to data – whom to target, when to target, what to target them with etc. To harness data and deriving insights, staying relevant and contextual with our embers, we are building the capabilities of our data analytics and engineering teams. We are devising ways to pre-empt and predict what would resonate with our members by using artificial intelligence and machine learning models,” shared Dureja. At any given point of time around 800 segments are being personalized on JetPrivilege’s website. That’s only because of the data journey that the brand embarked upon earlier on and the team is confident of going further on this journey to serve and meet the needs of an even larger set of members in a personalised way.
How are airlines going about rewarding travellers for their loyalty? Hear from senior executives at the upcoming #MegaAPAC (2018 Mega Event Asia-Pacific to be held in Bangkok, 28-30 August). https://lnkd.in/fTPx4xw
First Published on 20th July, 2018
Ai Editorial: An attractive reward portfolio today should not only aspire to deliver a variety of merchandise, but also needs to offer different ways of redemption. This could mean a combination of miles and cash for redemption, using loyalty currency for payments etc., writes Ai’s Ritesh Gupta
Enjoying rewards, privileges or perks by using miles or points makes a loyalty programme attractive.
But for many, even if after spending money to attain a certain status or accumulating miles, there is always that gap that disappoints many when it comes to realizing what they had desired. While there are members who do gain rewards they desire, the vast majority of customers they either have to wait or even fail to redeem something of interest.
Airlines have been on-lookout for ways to bridge this gap.
The focus is on offering choice and flexibility when it comes to redemption. As asserted by Loylogic, an expanded and attractive reward portfolio today should not only aspire to deliver a variety of merchandise, but also needs to offer different ways of redemption. Airlines can do so by offering members of their loyalty programme access to miles/ points for their chosen online stores or allowing them to transfer their points onto a bank card and convert them into cash to shop anywhere they want.
Initiatives that exemplify this:
1. Counting on a combination of miles and cash: One area that airlines have focused upon is unredeemed miles. They need to deal with inactiveness or discontentment among members by being creative. There is scope for choice and flexibility and this should reflect in letting members spend, even a small amount of miles, on what they desired for.
In this context one trend that has emerged has been about offering a simplified option at the check-out, say one click or a tab, to pay with miles and also miles + cash to sustain the stickiness of a loyalty programme.
For example, the Lufthansa group has enabled members to pay in miles, cash, or a blend of the two. The group chose to strengthen its digital interfaces and made it simple by introducing new functionalities such as a slider. This way when a member accesses LH.com with their Miles & More details, they can choose the flight and tweak the number of miles they’d like to spend. Users can do the same by sliding the scale or also by sharing the number of miles. Members need a minimum of 7,000 award miles available in their personal mileage account. According to Lufthansa and Amadeus, the flight fare is broken from standard currency into part miles/ part cash, with different ranks. What this means for loyalty members is that they can their loyalty currency accumulated with ease. And the transaction results in new mileage. According to Lufthansa, this functionality has been introduced “for all revenue tickets and commercial classes, with the airfare calculation based on the total ticket price, including taxes and fees”. The challenges associated with tickets that were bought using this functionality included handling of a rebooking or a refund scenario involving a combination of both cash and miles.
There are airlines that are eradicating issues related to “shortage of miles”. Enrich the frequent flyer program of Malaysia Airlines, is enabling members of a loyalty program to acquire more of their program’s miles. So members can purchase additional miles online via an airline-owned channel.
2. Paying with loyalty currency on non-airline owned channels: Airlines have been extending the use of their loyalty currency in channels outside their own environment. So members can use their miles or points for an online purchase on a 3rd party site. Also, one can collect more miles while paying with money. For instance, SWISS Miles & More members is letting frequent travellers to use their miles or a combination of miles and cash to shop for Swiss household names such as Vögele Shoes and Magando.
This aspect of letting members shop on their preferred channels and still letting them use their miles is important. According to Loylogic, mature airline and coalition loyalty programs tend to see over 50% of miles earned through partners.
3. Being an integral part of a member’s lifestyle: Other than luxury, fashion or any high aspiration products, airlines are also looking at integrating their respective loyalty programs into a member’s everyday life. This could be for earning miles for fuel for your car or grocery shopping.
How are airlines going about rewarding travellers for their loyalty? Hear from senior executives at the upcoming #MegaAPAC (2018 Mega Event Asia-Pacific to be held in Bangkok, 28-30 August). https://lnkd.in/fTPx4xw
First Published on 17th July, 2018
Ai Editorial: Team effort and an iterative and phased approach have stood out in the way the likes of JetBlue, Lufthansa and Ryanair have gone about digitalization, writes Ai’s Ritesh Gupta
Airlines that have embarked on the path of digitalization are open to recruiting people from different backgrounds – VC, start-ups, data science etc. and encouraging their staff to think autonomously to innovate and validate at speed.
There are certain carriers such as Lufthansa and JetBlue that have chosen to incubate new, stand-alone digital ventures of particular strategic relevance. Among others, Ryanair and Air New Zealand have chosen to transform the digital experience of passengers by recruiting specialists in the arena of user experience (UX design), data science, product designers etc. These carriers started their journey of digitalization 2-4 years ago. There are already signs of how dedicated resources and investment are improving upon the passenger experience. And the approach of these carriers needs to be considered:
· Team effort: JetBlue, as a parent company, chose to assess the early stage start-ups via its arm, JetBlue Technology Ventures (JTV). The team at JTV not only evaluates the course of an early stage start-up but also links them with the parent company in take caring of pain points in the passenger experience. As explained by JetBlue in an interview with Ai, majority of the JTV’s portfolio “are companies that would work with JetBlue in 2-5 years”, even though some might begin commercial pilots in less than 2 years, and a small percentage of the portfolio includes moonshot investments. Among the list of companies that JetBlue has already chosen to work with includes Gladly for its customer service platform. The plan is to have continuous, real-time conversations through whichever channel they prefer at any given point of time. JetBlue chose to bank on a modern messaging interface that gives the airline the ability to communicate across channels. And Gladly asserts that the platform equips the airline with a passenger profile, not a case number. The customer service software captures the full history of every conversation. The output is a single conversation stream that brings human touch to serve a passenger in an earnest manner.
As for the approach of units like JTV or digital labs, the core team, including senior and experienced staff from the airline gets involved as early as possible. The work isn’t done in silos, expertise of various stakeholders involved – the airline, the VC arm or digital labs and the start-up jointly comes into play and eventually a specific solution for passengers is created.
· Iterative and phased approach: Ryanair has come a long way from an airline that was associated with ways focused solely on reducing cost. In fact, the shift to focus on digital assets is gaining traction as the airline’s "MyRyanair” membership has grown to 43 million. It was at 20 million or so in March last year. Also, the revenue generation by refining of digital assets is paying off, too. According to Ryanair’s annual results, the mobile and digital platforms have delivered a 13% increase in ancillary revenues (+4% per guest) to over €2 billion. Ancillaries accounted for 28% of revenue. Even as Ryanair has been focusing their digital retail platform, it needs to be mentioned that there could be shortcomings if the structuring isn’t handled properly.
If a full-service carrier intends to embrace a digital retail platform, then how should they go about drifting away from a heavy focus only on their process-centric IT system and bring in a business-critical digital platform? It is imperative to go after continuous delivery while running legacy systems, get closer to a series of quick wins in order to instil confidence in the organization and the digital platform has to be decoupled from legacy release cycles. There is a need to recognize the distinctive nature of digital platform economy versus traditional IT systems. “This may mean that the internal team is split into two parts so that it does not lead to confusion. It is very likely that airline will need to look for external partners to initiate digital platform strategy, just like Ryanair did,” explained Marko Javornik, VP/ GM Mobility and Travel, Comtrade Digital Services.
Javornik also underlined that the strategy is very important.
“Airline should be realistic in terms of what it can achieve. This means it should not try to compete with giants directly, but it also means it should not run away from ambitious plans. Another point of consideration is the significance of iterative and phased approach. Amazon started with books and then went to CDs and other things. The same applies to airline. Having a very small vertical slice working well can be immensely powerful. Building a kingdom in one go will probably fail in the digital world,” shared Javornik.
In an interview with Ai, ThoughtWorks also indicated that from a technical standpoint, the early digital initiatives are sustained via digital technologies that act as a 'shock absorber' between two systems running at different speeds. This ensures that neither system compromises the other’s speed and performance.
Hear from senior industry executives about the significance of running a digital platform at the upcoming #MegaAPAC - Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).
Follow Ai on Twitter: @Ai_Connects_Us
First Published on 25th May, 2018
Ai Editorial: Uniting all the sources of data, tailored dashboards for relevant teams and integrating the customer data platform with all the operational systems that airlines use it key to delivering 1:1 personalisation, write Ai’s Ritesh Gupta
How are airlines counting on data as a core asset? Is it improving a passenger’s journey on the day of the travel or during any phase?
It seems there is hardly action today based on data coming in from various touchpoints and sources. Even in the case of travellers who are flying with an airline, their queries in the middle of a journey are being addressed in a disjointed manner. For an example, a traveller’s flight gets delayed and promptly uses Twitter to convey to the airline that there is a connecting flight. Whether the airline is entitled to help or not, at least the airline can acknowledge the hassle that one has to go through at the time of boarding the connecting flight. It seems the staff is oblivious to the conversation that took place via Twitter. So even if the same passenger manages to catch the connecting flight by rushing to the gate, the staff managing the departure control system is simply clueless about the plight of this traveller.
There are certain questions that airlines need to answer:
· Can there be a sum of all interactions?
· Can there be one relevant dashboard, including one for the offline staff serving the passengers, to take apt decisions?
· How to respond to a query or a service request in real-time or in a seamless manner?
Here we assess 3 areas that need to be sorted:
1. Uniting data: A common challenge tends to be what to expect from a customer data platform. “Airlines first need to assess what kind of assets they have. So there tends be CRM, loyalty system etc. and along with this is their PSS, various touchpoints such as digital assets, city ticket offices, at the airport etc. So ensure the solution helps in uniting data from all the sources,” explained a source. “There is no need to do away with your CRM, but consider working out a customer experience management (CEM) platform. So CRM is where an organization could already be identifying and profiling passengers, how we bring it together and match it with data from the PSS, from loyalty systems and also make the most of data from social channels to craft a single view of the passenger. And then to operationalize after segmentation and working out of personas, the same (to operationalize) has to be done across all the touchpoints. So this CEM works in conjunction with all existing systems/ data sources for everyone to gain access to the single view of the customer. This CEM can be a foundation for customer-centricity, but airlines are on different paths. And this has to be studied closely.”
In case of JetBlue, a passenger doesn’t need to share their story or request again in case they are interacting via a company-owned channel or account. Because all interactions (say featuring a JetBlue account on Whatsapp, Facebook Messenger, Instagram etc. or an interaction at the airport or with a call centre executive) are captured and aggregated into a single conversational view of a customer. (This doesn’t encompass conversations from 3rd party sites). This solution sits on the top of a CRM and enables customer service. It can aggregate data on its own too – relating a profile’s social media handle, email id, phone number etc. So it’s an adaptable platform.
Airlines should start with data they have – whether they are loyal customers or not – from their own channels. Then over a period of time they can see how to work with 3rd party channels.
2. Tailored dashboards for different departments: The robust data management platform needs to support different use case functions. “Extract data as per the requirement and publish through analytics using business intelligence tools to work out a relevant dashboard say for the marketing department, or the finance team etc. So slice and dice for the relevant team,” mentioned the same source.
3. Passenger-facing touchpoints: Other than collecting data, organisations also need to gear up for decision making algorithms to handle increased complexity. Eventually, one would end up working out a key hub for business decisions to be made at scale. This should also encompass a dashboard for the airline staff to complement the interactions in the offline mode. A major differentiator would be how passenger are served at offline points. That’s a major facet of how the actual consumption takes place. So, for instance, a traveller had abandoned a ground transportation option at the time of booking a flight on airline.com, but didn’t convert. Can the airline take this forward on the day of travel, say via their staff at the airport? How can the screen (at the check-in counter or the boarding gate) share relevant, contextual information about the passenger?
On how would this work, a specialist mentioned that there won’t be two different monitors or main access points – one for usual departure control at the boarding gate and the other one featuring information about passengers. “This shouldn’t be the case. This is where the integration into the systems becomes very important. So if the airline staff is using the DCS and there is also CEM that has information about the profile of passengers, then the technology partner needs to streamline the interface for the staff by making extremely simple to use since there isn’t much time for one to interact with passengers. “It could be only few seconds (interaction with passengers), if we consider the paucity of time,” said the executive. “Integration is key, the staff at the boarding gate can open up a separate screen within their main access point. Alerts would hold the key. You can expect the staff to go through all the information about the passenger to deliver a personalized service. The robustness of the tool comes to the fore via a central hub for business decisions to be made at scale.”
Hear from experts and assess the journey of airlines at the upcoming Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).
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First Published on 26th March, 2018
Ai Editorial: It is not easy for an organization like airline to collect data, unify it to work on a profile and "operationalize" into actionable data. But airlines are moving in the right direction, writes Ai's Ritesh Gupta
"If you are just looking at data, then you aren’t really doing anything. The problem is everyone sees data and don’t really take action," this statement from a senior executive from Hong Kong Express Airways is an apt answer to why airlines tend to lag behind in the race of data-driven decision-making.
One of the biggest gains that has emerged from what the likes of JetBlue, Hong Kong Express Airways, Finnair etc. have done over the last 18-24 months is their decision to start, be it for loyalty or customer service. Here are few examples:
Hong Kong Express Airways’ reward-U program: This lifestyle and loyalty program, launched in April 2016, had over 1 million members in 16 months. Serving a growing segment of Millennials, the program has been working on a plan to club members according to their preferences, behavior etc. and forming different tribes. The concept of “tribes” is based on overall activity, for instance, travel, retail, food etc. and a member can be in multiple tribes at any time base on a minimal level of activity. The team has been analyzing data and this new initiative is a direct result of spending pattern that the team has been observing in terms of consumption and activity. The team also asserts that they have been getting a picture of what people are doing, and the association with a low-cost airline doesn’t mean that the members are "low spenders". They are high spenders. They might save money on airfares, but they can spend (relatively lot more) money on accommodation and so forth. Their retailing activities are not low-cost either, can be termed as high-spend. They are bargain hungry but not averse to spending, too.
The airline decided to take specific learnings from data, chose to act on it, and then observed what happened. "We try to experiment from what we are seeing, try to stimulate activity or some type of behavior. Rather than accumulating data in huge amounts, we are taking snapshots and acting on it," shared a senior executive from the airline.
JetBlue's focus on customer service: JetBlue today is able to aggregate a single view of the customer (on service channels). So all interactions (say featuring a JetBlue account on Whatsapp, Facebook Messenger, Instagram etc. or an interaction at the airport or with a call centre executive) are captured and aggregated into a single conversational view of a customer. The airline is looking at adding information to the “profile” of a traveller. Their platform sits on the top of a CRM and augments customer service. It can aggregate data on its own too – relating a profile’s social media handle, email id, phone number etc. By capturing data and maintaining profiles, any organization can move from mass personalisation to macro personalisation to micro personalisation, and eventually to analytics-driven personalisation.
Finnair's journey of personalisation: Finnair also has been on the path of moving from rules-driven personalisation to an analytics-driven phase. The team is clear that every time passengers interact with the airline, the team ends up learning more about them. The focus is on behavioural profiling, demographics and personal data, as well as historical and preference data. The airline has been displaying targeted content based on segmentation analysis, dynamic content for the upcoming flight (ancillary up-sell) etc.
Hear from experts at the upcoming Ancillary Merchandising Conference, to be held in Edinburgh, Scotland this year (9-11 April, 2018).
For more info, click here
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First Published on 13th February, 2018
Ai Editorial: JetBlue Technology Ventures (JTV), the corporate venture capital arm of JetBlue, not only understands the trajectory of an early stage start-up but also partners with the parent company to find innovative technology solutions that resolve pain points from the customer journey. Ai’s Ritesh Gupta learns from JTV’s Christina Heggie how the efforts are coming along.
As travel brands find themselves in the midst of what is being described as the “Fourth Industrial Revolution”, the race – to survive or to innovate as a business, to excel in the arena of customer-centricity, to outrival competitors – has clearly intensified.
In today’s era of “datafication” and unceasing connectivity, businesses have to consider a broad swath of technologies to serve travellers optimally; how to be part of the trends including the Internet of Things, data science, artificial intelligence etc. so that these businesses can emotionally connect with travellers?
Imagine what needs to be done in real-time to make every interaction with a traveller contextually relevant and personalized.
Companies today are trying to solve the issue of a digital identity in a connected world, understanding each and every click, evaluating unstructured questions, considering past interactions and buying patterns, and coming up with a relevant answer or deal via the customer’s chosen touchpoint in real-time. Yes, the conundrum is riddled with complexity, but that’s what the race is all about. Owning the customer data and shaping up experiences that fit in perfectly within the passenger journey.
So where do airlines stand today?
If one were to assess the parameters of knowing about a traveller/ customer and having a say especially in the early part of the booking funnel, then airlines lag behind. That has been the story for years, but now the gap, with front-runners being the likes of Google, Amazon, Facebook etc., will increase if airlines don’t respond.
She asserts that it is imperative for travel providers, including airlines and hotels, to gather customer data in a single database or warehouse, build on it with additional customer insight, and accordingly make progress in the right direction. “If a company can’t access their own customer data, record behavior, analyze purchase history and access all information in a single repository, then we (airlines) can’t even get close to attaining customer-centricity.”
While data platforms, or even marketing technology and automation tools, have been around for a while, airlines have rather been slow to act. And a lackadaisical approach wouldn’t help as trends like artificial intelligence-powered booking are gaining momentum. So even as there are promising developments such as voice-powered search or immersive virtual reality experience that can make it much easier to plan a trip, airlines likely have a number of steps to take before they’re able to deliver a seamless travel journey.
Heggie acknowledged that factors such as legacy technology and a siloed approach to decision making have for long bogged down the functioning of carriers but it is time to brace up for the future. Other than transforming themselves as organizations to embrace digital agility, airlines also need to be a part of the emerging digital API ecosystem. It is important to note that today’s digital economy works through a platform economy model.
Being part of an innovation curve
It’s been almost two years since JetBlue, as a parent company, chose to incubate, invest in and partner with early stage start-ups via JetBlue Technology Ventures (JTV). The team at JTV not only understands the trajectory of an early stage start-up but also partners with the parent company in removing pain points from the overall journey of travellers. In all, there are around 16 portfolio companies that JTV is associated with. Heggie shared that the majority of the JTV’s portfolio “are companies that would work with JetBlue in 2-5 years”, even though some might begin commercial pilots in less than 2 years, and a small percentage of the portfolio includes moonshot investments. Airlines are adept at doing what they have been doing over the years, and since operations are process-centric and complex, it can be challenging to divert resources into new innovation projects. “So we would typically interact with the JetBlue team, bring about the new offerings in front of them, and get closer to a point where start-ups would be ready to work (with an organization of JetBlue’s stature and size),” explained Heggie.
So, whether capitalizing on artificial intelligence for trip planning (via partnership with Utrip, a destination discovery and planning platform that helps in crafting a personalized, hour-by-hour vacation itinerary) or counting on big data to predict airfare (via FLYR) or keeping track of all interactions related to customer service taking place on a JetBlue-owned channel (via Gladly), JetBlue is ensuring that it is preparing for the future through partnerships and pilots that steadily lend a new dimension to what it has to offer as an airline.
Overall, the team at JTV focused on five investment themes which include a seamless customer journey; technology-empowered service; the future of maintenance and operations: innovation within distribution, loyalty and revenue management; and evolving regional transportation models.
JetBlue’s own ecosystem
It is being highlighted that certain companies are controlling the top part of the travel planning funnel, and airlines are increasingly relying on 3rd party sites for traffic generation. Heggie says there are clearly limitations to what technologies companies can do in this sector, and one of them is having a say in the actual consumption of the travel product. “If our customers don’t care about us as a brand, then we are just another airline and risk becoming simply a commodity transporting them from point A to B,” says Heggie.
And if airlines intend to have a bigger say in the booking funnel, including monetization via targeting the “second wallet” in the era of “Fourth Industrial Revolution”, then crafting one’s own ecosystem is must. We assess one example of how JetBlue is gearing up for the same:
“Customer service is one of the areas that JetBlue has always been laser-focused on, and we wanted to find technology that would truly transform customer service, delivered by a company that puts people at the heart of what they do,” said Heggie. Today this initiative has progressed to a level where it complements tracking every interaction on JetBlue-owned channels and then linking with a “profile” of a traveller. “We chose Gladly in order to aggregate a single view of the customer (on service channels). So all interactions (say featuring a JetBlue account on Whatsapp, Facebook Messenger, Instagram etc. or an interaction at the airport or with a call centre executive) are captured and aggregated into a single conversational view of a customer. (This doesn’t encompass conversations from 3rd party sites). This means a passenger doesn’t need to share their story or request again,” said Heggie. “This offering (from Gladly) sits on the top of a CRM and enables customer service. It can aggregate data on its own too – relating a profile’s social media handle, email id, phone number etc. So it’s an adaptable platform that way.” There are multiple benefits of this approach:
The company is also constantly evaluating other trends, for instance, blockchain technology. One of the beneficiaries has been Filament. The company’s decentralized network stack allows any device to connect, interact, and transact value independent of a central authority. The focus is on asset management, and JetBlue believes the solution’s smart contract capabilities can contribute in operations of airlines by tracking of assets. Heggie expects blockchain technology to play a significant role in loyalty, travel distribution and payment space.
Standing out in the race
As it turns out, JetBlue is taking rapid strides to stand out in the race. By adopting the corporate venture capital model, the team is focused on strategic returns in today’s world of rapid innovation. And the outcome is expected to be robust – removing pain points from the journey of the travellers, and being in control of the dialogue with the customer.
And the culture of learning and testing with the entire organization involved is a major pillar. “The goal is to learn from the start-ups, strengthen the JetBlue ecosystem, and pave way for these start-ups to transform our industry,” concluded Heggie.
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